Quick Money Tips to Increase Your Wealth in Time and Money

& Links

Small and steady steps lead to great success. Today, get some inspiration to make those small life changes to boost your overall well being and happiness. Implement these ideas in small bits for lasting success.

In reading Money Magazine’s, Get Happy in 2012, I was intrigued by the research based money tips to improve well being. The following suggestions are shamelessly borrowed from that article.

I found it incredible that in a survey of 28,000 Americans, from the University of Georgia, having an emergency fund is the greatest predictor of financial satisfaction. I wasn’t surprised that having a rainy day fund was important, I’ve been stressing that for eons. But, that is was the largest predictor of financial satisfaction, even greater than paying off credit cards or owning a home was a surprise.

For financial satisfaction, make saving for that emergency fund PRIORITY NUMBER ONE.

It’s not news that having credit card debt causes stress. But here’s an easier way to eliminate it according to State College, Pa. financial planner Jeff McClarren. Choose a monthly amount to pay off (make sure it is much bigger than the minimum payment) and focus only on that amount! Worry less about the total amount of the debt, which can be overwhelming and scary and keep paying that monthly amount and the debt will decline before you know it. Of course, do not charge anything else. Apparently, it’s overwhelming to look at the aggregate amount of debt. You can handle tackling that payment every month.

Frequent little splurges, yield greater happiness than infrequent big indulgences. The result, more happiness at less cost. So get that special bottle of nail polish, spring for a CD or DVD at the used media store, or indulge in a gourmet box of cookies. You’ll feel rewarded and satisfied, on a budget.

Next, check out what I’ve been reading. Lots of money and happiness articles .

BARB RECOMMENDS

Time Magazine reported about happiness and money in a study which found that you need to earn $75,000.00 per year to be happy. I don’t claim to know whether this is true or not, but if you need a benchmark to shoot for, here it is. Read about what others have to say on this money and happiness topic.

Arthur Brooks from The American Magazine also asks, Can Money Buy Happiness? The response is no, but success can! So here’s another take, become successful and increase happiness, of course I bet money will also follow.

Ben Edwards writes, 5 Reasons Money Can Buy Happiness for Wise Bread.

Can Money Buy Happiness? Yes it Can, according to Suba at Wealthinformatics. What are your thoughts?

Happiness and Money; How Much Money do You Really Need? asks KNS Financial? Are you one of those folk who reaches one financial level and then raises the bar? Well what do you think is the limit?

Money and Happiness; What Say You? at the Millionaire Nurse Blog. More thoughts on this age old question.

PT Money says You Need to be Happy to build wealth. I’m not so sure. What about you?

Krantcents asks, Will Money Make Me Happy? Certainly having no money will not make one happy.

Narrow Bridge want to know If Money will Make You Happy? There certainly is a lot of discussion on this topic.

Money Reasons has a new solution to happiness: Multitasking and Making My Family Happy.

5 Reasons Money Can Buy Happiness at the humorous Cracked.com.

Jeff Rose’s guest article on Smart Passive Income is a must read for anyone with a dream! He maps out how his persistence led to both blogging and personal business success.

Barbara Friedberg Across the Blogosphere

Take some time to visit these excellent sites which recently featured my work.

The Yakezi.com; Featured article, Patience and Persistence-The Path to Unlimited Success

FindtheBest; TD Ameritrade Research Tools

Len Penzo Black Coffee

Totally Money Blog Carnival at Mother Miser

Carnival of Personal Finance-Ask the Right Questions at Wealth Pilgrim

Tax Carnival #95 at Don’t Mess with Taxes

The Frugal Toad Weekly Round up-Playoff Edition

Carnival of Financial Planning at Credit Cards Canada

Do you think money can buy happiness?

image credit; Princ Arora

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It’s All About the Interest Rate

When shopping for a mortgage, it’s all about the interest rate. The interest rate, also called the annual percentage rate or APR, is essentially the cost you assume for paying back the mortgage over a period of time rather than all at once. Your credit score will heavily influence the mortgage rate you qualify for – lower credit score means, higher interest rate, and higher

BUY A HOME

monthly payment. When you realize how much money you can save over the mortgage life by improving your credit score, you’ll want to wait to purchase your home until you can qualify for a lower rate.

Best vs. Worst Interest Rate Examples

The difference between APRs with a good and bad credit score can be as much as 1.5%, possibly more depending on the lender. The difference is significant for monthly payments and total interest paid. For example, on a 30-year fixed rate $200,000 mortgage loan, a person with a 630 credit score qualify for a higher 5.19% interest rate. The monthly payment would be $1,097 and the borrower would pay a total of $194,915 in interest on the loan.

Now, consider a person with an excellent credit score of 770. This person would typically qualify for the lowest interest rate, which is around 3.6% these days. On a $200,000 mortgage, the monthly payment would be $909 and total interest paid over 30 years would be $127,385.

The bottom line, you’ll spend almost $100 more on your monthly mortgage payment if you have the lowest credit score. But the real shock is the $67,530 more you spend over the life of the mortgage. That’s enough money remodel the home, pay for a child or grandchild’s college, or put toward retirement.

The Difference Just 50 Points Makes

The first two examples are the extremes – the lowest and highest credit score/mortgage scenarios. If your credit score is at the lowest range, it might take several years to bring it all the way up to excellent. Raising your credit score just a little bit can still produce significant savings. For example, a borrower with a mediocre credit score, around 680, might get a 4% interest rate, pay $955 monthly, and spend a total of $143,739 in interest.

With just a 50-point increase in your credit score, you could shave $46 off your monthly mortgage payment and $51,176 off the total interest you pay over the life of the mortgage.

With higher mortgage amounts, the interest rate differences become more significant and saving money is more imperative. On a $250,000 mortgage, there’s a $234 difference in the monthly payment and a $84,413 different in the amount paid over the life of the mortgage.

The numbers in this scenarios were generated from my FICO.com’s Loan Savings Calculator. You can use the calculator yourself to see how much money you could save on a mortgage of a different amount.

Before shopping for a mortgage, check your credit score to see where you stand. If your credit score is in the low range, spend a few months repairing your credit and focusing on your credit score. The money savings will be well worth delaying your home purchase.

J.D. Roberts is a seasoned writer in personal finance, specializing in credit repair. You can find more of his articles at CreditRepair.org.

image credit; inspiration gallery

What steps have you taken to improve your credit score?

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Information sourced from Genworth Financial

Folks today are presented with the best interest rate environment in over 50 years. That’s right, you can get a home loan for as little as 4%. Compare that with the late 1970′s when mortgage rates were upwards of 12%. With those historically low mortgage rates, shouldn’t everyone buy a home? Maybe…..

Or maybe not……There is another side to the purchasing decision; the home price. It doesn’t matter if the interest rate is 2%, if you have no down payment and can’t afford the monthly house note, then buying a home is a bad idea. A home purchase is only a good idea if you meet basic criteria.

What’s a potential home buyer to do?

Home Buyers Checklist

Consider buying a home if you meet these criteria:

Expect to live in the home for 5 or more years. We made the mistake of buying a home, and moving two years later. That was an expensive $25,000.00 lesson .

Saved a reasonable down payment. I recommend 20%, buy I understand that is no easy feat. The buyers of our home last Spring had an FHA loan with a very small down payment. Fortunately, they had steady and well paying jobs which could easily cover their mortgage payment.

BUY A SMALL HOME

Less than 28% total debt payments including the mortgage payment. Calculate by adding up all monthly debt payments and divide by your monthly gross (or net if possible) income.

Steady employment which is likely to continue.

An emergency fund of 3+ months of living expenses on top of the down payment.

Motivation and resources to fix the leaks, replace the worn out dishwasher, and keep the property well maintained. Some folks aren’t cut out for home ownership and would rather call the landlord when the toilet gets backed up.

The Takeaway

It’s only a good idea to buy a home if you are financially and emotionally ready to tackle all that goes along with being a homeowner. My grandparents always lived in apartments and on the bus lines. No home ownership and access to public transportation. In some ways, it makes life simpler.

Housing for many living on the coasts is simple financially out of reach. International mortgage trends are a bit different than those in the USA. In fact, in some countries, you must pay cash in order to purchase a home. In others, you may only lease the land for a limited period of time.

If you decide to take the plunge and buy, be smarter and safer with mortgage insurance. Make a detailed budget, including a replacement fund for those unexpected repairs, before deciding to purchase. Look thoroughly, negotiate hard, and make sure to have your future home inspected before you commit.

We just moved across country and bought a beautiful condominium (short sale) in an area which would have been out of our reach a few years ago. As with most of our prior homes, we purchased a home for an amount less than we could afford. And we hope to be here a long time.

Are you considering buying a home or condo next year?

 image credit; audiovisualphoto

How to Live Well if You Work in a Low Paying Field

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In Part 1,  I responded to a reader who wondered Why I Freelance for pay well below my normal hourly rate of pay. I talked about a variety of satisfactions I get from educating others about personal finance and wealthy living.

In Part 3; How You Turned Your Passion Into Cash, others share success stories and welcome your input as well.

This question got me thinking about the millions of folks out there who are passionate about doing work that does not pay well. These fields include acting, music, the arts, social work, community service, non profit work, lower pay administrative work, service jobs, restaurant work, retail sales, and many other jobs. In fact, there are probably more lower paying jobs than those that pay well.

Pay level satisfaction is impacted by your own perceptions. Many newly employed college grads, are thrilled to have a job at any pay grade!

I am certainly not imposing my personal values on whether your job is ”well or poorly” paid. I’m offering suggestions to live wealthy, regardless of income.

You may be in a lower paying job, either by choice or by default. Here are some ideas about how to live well and build some wealth in spite of your pay grade.

Adjust your expectations; Forget how anyone else lives. I’ve been fortunate to travel the world. In most countries even the wealthy live in what we in North America would consider small apartments. No matter the size of your family, you do not need a large home. Scale back, live in a smaller home or apartment than you thought was comfortable. Add a roommate or two. You may be surprised at how little you really need. Want some privacy? Go to the library or for a walk.

Take public transportation; Although El Carino and I both have (old) cars, I take the train or walk whenever possible. Jennifer from Little House in the Valley rides miles on her bike.

Use your tax dollars; You pay for parks, libraries, free community art and theatre programs with your tax dollars. Get that money back by using those resources for your entertainment and enjoyment. There are tons of “free” events in most major cities, especially around the holidays.

Eat well and cheaply; Stick to a simple diet. Consider some vegetarian dishes spiced up to make flavorful and delicious. I love a meal of beans and rice. Make a big batch and freeze some for later. Buy in season fruits and vegetables. Go light on meat and prepackaged processed foods. You’ll be thinner and healthier as well.

Spend mindfully; Make it difficult to overspend, don’t spend your leisure time at the mall near temptation. Think before you spend and plan your shopping trips.

Save something, no matter the amount; Get in the habit of saving. Have a small amount transferred from each paycheck into a savings account.

Get out of debt; However you do it, you cannot live on less with debt! For debt help, read these recommendations from top personal finance bloggers; Consumerism Commentary, NoDebtMBA, Debt Sucks Blog, Debt Free by Thirty, Fat Guy; Skinny Wallet, and Money Help for Christians.

Enjoy what you have!

Make sure to read Part 1: Why I Freelance; How to Live Well When your Passion Doesn’t Pay Well.

And Part 3; How You Turned Your Passion Into Cash; be sure to chime in with your story.

image credit: Cuba Gallery

I Need Money

I’ve never tackled this subject, but I realize sometimes there are certain circumstances when you need a loan.

• You want to take a course which will make you more employable.
• You need a small business loan to tide you over for a few years.
• You’re committed to paying off all of your debt, want to consolidate it, and make one payment per month.
• You need to make a home repair, and the banks aren’t lending.
• You got yourself into a short term  jam and don’t want to add to your credit card debt.
• You got hit with some unexpected medical expenses.
• You owe the IRS and want to spread out the payments a bit longer.
• Or, you have an important personal need.

In today’s tight money environment, when banks are slow to lend, you might consider borrowing with peer to peer social lending. It’s a relatively new concept where you borrow from regular folks instead of a bank. The lenders benefit because they are helping you and they get the interest from the loan. The borrowers benefit because they are able to borrow the funds they need without a bank middleman.

What is the Process to Get a Loan?

Now, this does not mean you just show up and get the cash.
A borrower must have at least a 640 credit score, and the better the score, the lower the interest rate. To get started a borrower completes an online form. Next, the basic information is verified to make sure the applicant meets certain minimum qualifications. As part of the process a borrower must write a statement describing his or her financial need. In fact, since regular folks contribute to your loan, the more specific and well written your description the more lenders will be interested in funding your loan. And after you are approved, your listing goes on line and lenders elect to contribute to your loan. You can even have friends and family contribute.

If you have really good credit, you could get an interest rate for as low as 6.59%, although realistically, most of the rates are higher. Actually, the interest rates can go as high as 30% for someone with very poor credit. But as with any loan, the better your credit score, the lower your interest rate.

Where to Learn More About Peer to Peer Social Lending?

Click on the ”NEED MONEY” picture to get to the Prosper website. Next, checkout their blog, other folks’ loan listings, and get all the information you need. To apply for a loan, just click on the BORROW tab on top. I have decided to try out this concept by lending through Prosper. I’ll be writing about my experiences as a lender in the future.

And, in the meantime, please check out my favorite debt blog, The Debt Myth for really helpful advice.

Have you ever been in a real financial jam? How did you get out of it?

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A method to grow your blog readership is to visit other blogs and comment on their articles. The theory behind that strategy, as I learned from the Problogger 31 Days to a Better Blog is that the more recognizable you are on line the more likely others will want to visit your site and read what you have to say. Krantcents has taken this strategy to the highest level and consequently is growing his readership quite substantially.

As I was visiting some of my favorite sites, Yes I am Cheap, My Multiple Incomes,  Budgets are Sexy, and Len Penzo dot com, I found a theme. Now, this theme is not new to me, but it got me thinking. There are a group of bloggers who choose to share their net worth, debt, and spending figures.

HERE’S MY SECRET; As a natural voyeur, I find this information fascinating. I am both amazed and curious about those who share this most sensitive data, and I can’t stop reading it! On top of that, I can’t help but compare my metrics to theirs. Sometimes I come out on top and other times, not so much.

My realization was that there are advantages and disadvantages of both sharing your personal financial information on line and reading about others who disclose this sensitive information.

Advantages

For the ones who put their information out there, I’ve heard it is motivating and serves to hold them accountable. That’s what Flexo of Consumerism Commentary shared with me during my Personal Finance Luminaries interview with him. For the bloggers sharing their earnings on line, it is a source of pride that readers enjoy their articles and advertisers support them.

For the readers of these financial disclosures, we get to peek inside others’ bank and debit accounts. This fulfills the prurient curiosity in us.

Disadvantages

With such transparency on line, there is always a possibility that some evil hacker will get access to someone’s identity or financial data and use it for themselves. If you use your own identity and share this personal information, it may be a bit uncomfortable when your boss, friends, and family have all of your financial statistics.

As a reader, you might feel badly if your net worth or blog earnings don’t measure up to those of another. After all, we all tend to compare ourselves a bit with others. This comparison might also cause you to neglect some responsibilities and devote more time and effort to blogging than is appropriate for your situation.

The Takeaway

In blogging as in life, watch out for the tendancy to compare yourself with others. You create uneccessary stress by worrying about the decisions and actions of those around you. Be mindful of your own goals and objectives and don’t be swayed either positively or negatively by what you read about others’ endeavors. After all, the only one keeping score is you!

What’s your secret take on this topic? Are you a financial voyeur? Or, what leads you to share your personal data?

image credit; photoshoparam Dan

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We just moved across the country, purchased a short sale condominium, and took out a new mortgage. Our credit is stellar, yet because the property we were buying was a short sale, and we wanted to close the loan before my husband began his new job, the mortgage company made it quite difficult to get the loan. After many trials and tribulations, we did get the loan, a 30 year fixed loan at an interest rate of 4.75%.

Historically, 4.75% percent is quite a low interest rate. In spite of published rates below 4.75%, I’m content with the rate we received and am equally pleased to be on the other side of the entire headache of getting financing for and purchasing a short sale property.

What to do to get the best interest rate available for your loan.

• Know your credit score.
• Pay your bills on time.
• Use some of your credit limit, but not all.
• Keep credit inquiries to a minimum. Frequent inquiries lower your score.
• Use an e mortgage calculator to compare rates.

Save as much as you can for your downpayment. A larger downpayment combined with a lower mortgage rate, will keep your housing costs affordable.

Have I missed any tips to get a low mortgage rate?

written on behalf of  e mortgage calculator

image credit; Rev Dan Catt

a version of this article was published March 1, 2010

“A man in debt is so far a slave.” Ralph Waldo Emerson

Debt, simply put, is buying something now, that you don’t have the money for! If a man or a woman is in debt, as Emerson stated, he or she cannot be free! Those of you with lots of debt already know this!

MAIN TOPIC ; Understand How Debt Works

If you buy something you can’t pay for now, you are obligated to pay back the money you borrowed with interest. If you borrow $300.00 to buy a blue ray player, i.e. you pay for it with a credit card and don’t pay the bill in full at the end of the month; you are borrowing the money for that player at 18%, 28% or even more interest. As long as you go without paying for the player in FULL, at 28% interest, you are tacking on $84.00.

OK, you’re probably thinking, “Barb, you’re an idiot! Tell me something I don’t already know. I’ve hit every blog talking about debt reduction, and I have too much debt, there’s too much stuff I want, and it’s just too hard to get rid of it!!”

Debt Reduction Starts with Your Mind!

Begin by answering these brief questions:

1. Do you want some financial and money skills?

2. Do you want to reduce stress make your money life easier?

If you answered yes to those 2 questions, you are in the right place! But here comes the hard part; Be honest with your answer to question 3:

3. WHAT ARE YOU WILLING TO GIVE UP?

Debt reduction seems simple. Kind of like dieting, eat less and exercise more. Only in debt reduction the strategy is spend less and put extra money towards interest payments. In theory, it’s easy, in practice, not so much.

My favorite debt blog, The Debt Myth explores just this issue in ”Reality versus Good Intentions”.  Debt reduction requires discipline and intention. That’s why I asked those questions at the beginning of this section. If you want to pay off debt and gain financial security, you have to give something up and you have to take a small action.

I did not say: “What do you WANT to give up?” Obviously, most of us want it all and would prefer to get something for nothing. Unfortunately, that’s not how life works.

In order to get something of value, you have to be WILLING to give something up.

Practical Application; Where to Begin?

Here is the secret, if you saw any of my relatives in the store or at a restaurant; you would not have any idea of their financial accomplishments. You wouldn’t look at one of my relatives and say, “Oh, I know she’s loaded.” As a matter of fact, with few exceptions my immediate family and relatives look middle class, yet with few exceptions they are highly educated and upper middle class with a few millionaires thrown in. Their aspirations and mine are, “do not attempt to look rich to impress others.” As Thomas J. Stanley, PhD says in Stop Acting Rich…, And Start Living Like a Real Millionaire, as well as in his other studies of real life millionaires, most wealthy individuals do not fit our outside expectation of how rich people should look. That is because they have saved, invested, and budgeted their money carefully, not spent it on things they could not afford.

In order to have financial control, you have to be willing to give up, “Dressing, living, and shopping to impress others!”

Be your own judge. Don’t let TV, your neighbors, your friends’ influence how you spend. Clearly, you don’t need me to tell you this, but, you are in debt because you are spending more than you are earning!!!

To get out of debt, you need to be WILLING to do something different. Take a moment or two and really think about what you are WILLING to give up.

Action Steps:

Get a notebook and label it: “(your name) Personal Finance” and keep it by the computer. Use it to keep all of your personal finance goals, thoughts, activities, and plans.

Change your mind!! Give up the idea that you need to impress others and overspend to look rich.

1. Make 2 columns on a paper in your personal finance notebook and write down the ADVANTAGES and DISADVANTAGES of overspending.

2. Write down 5 expenses that you can cut out or reduce immediately.

Do these 2 activities right now. It takes only 5 minutes and the results will be priceless. By writing them down, you are committed to improving your spending.

Writing and talking about goals increases the chance that you will accomplish them! What expenses you are WILLING TO GIVE UP?

image credit; ShutterMoth

Just out, you must read my latest Benzinga Brain Trust column, Advice for Investors, Informed by Ben Bernanke

LIVE PERSONAL FINANCE LESSONS FROM  FINCON

These past 3 days I learned scores of tips from the top personal finance bloggers in the world and I want to must pass them on to you. I want you to live a wealthy life, personally and financially and I can help you do that. For the next week I am going to divulge a tip a day that, if taken, can lead you closer to your dream life.

Personally, I’m at a crossroads in my own life. I have more to do in my life than I can accomplish in the amount of time available. So, I’ll let you in on a secret, these tips are for me too, to help me organize my expanse of personal and financial aspirations.

Step back this week, and let’s work on our personal dreams and see if we can take a step closer to wealth in money and life.

TIP 1; You Can’t Do Everything, But You Must Do Something

“If you say yes to one thing, you automatically say no to another. And, conversely, if you say no to something, you free up time to say yes to something else.” Suze Orman

One of my favorite presentations was a top notch tutorial about “How to Create and Sell a Product” by Adam Baker of Man vs. Debt. Adam is a credible spokesperson as he completely transformed his life going from deep debt, selling everything, to a six figure income earned from his products.

Among his inventory of products is a multipart video series detailing how to get out of debt. His comprehensive advice included recommendations to poll your audience and test your ideas, basic market research so you are giving your audience what they want. He also talked about the psychology of pricing and how $99.00 is better than $100.00 and if you are going to charge $22.00, you can probably get the same amount of sales for a price of $29.00. The abundance of information went on and on. He is an awesome resource for Selling Your Crap and getting out of debt.

The presentation was awesome, products professional and high quality. And this system is a great money making opportunity for him. And, it reminded me that everyone has a niche. A niche is something you are great at for which people will pay! Although this was Adam’s niche and he was quite successful, and there were some excellent takeaways, the key message is this; INVENTORY YOURSELF and find your niche.

Carve out a few minutes, maybe during a break at work, or when the kids are napping, and think about your own situation.

• Do you have enough money?
• Do you have enough leisure time in your life to really enjoy yourself every day?

If not, realize that something has to change.

Here’s how to get started today.

ACTION STEPS:

Get a notebook and label it: “(your name) Personal Finance” and keep it by the computer. Use it to keep all of your personal finance goals, thoughts, activities, and plans.

Write out the answers to these questions:

1. What do you like about your money and lifestyle?
2. What do you want more of?
3. What do you want less of?
4. Write down 3 actions you need to take to better your situation.
5. Put in your planner how and when you are going to get started. (For example, if you’re in debt, visit Man vs. Debt; if you need to learn about investing visit Oblivious Investor and check out his blog and books.)
6. Get rid of the activities that won’t get you where you want to go.

Decide how you want to focus your own time and energy. Use what you read to inspire and motivate you to action on your own goals.
No one is excellent at everything, but everyone has a talent and a dream.

Stop by next time for Part 2, The Power of Networking.

And don’t miss Part 3, Learning from Others

For a quick overview of Investing Strategies, pick up my FREE eBook; 20 Minute Guide to Investing (top right of the page). If you like what you’re reading, sign up for my RSS feed or email subscription and follow me on twitter so you get the word immediately.

What is your success dream?

image credit; anshumm.com

News Flash; I’m nominated for a Plutus Award in the Best New Ebook Category for my ebook 20 Minute Guide to Personal Finance (download for free on the right)!! Please vote for me here!

Help Your Pocketbook; Learn a Bit of Economics

Ben Bernanke is the Chairman of the Federal Reserve Bank and a key player in US monetary policy. His speeches move the markets.

The Federal Reserve Bank is charged with two tasks:

1. Maximum employment
2. Price stability and low inflation

The federal reserve isn’t doing too well with #1,unemployment is really high! But prices have been relatively stable and inflation low, so I’ll give him a pass on #2.  The federal reserve has a big impact on interest rates and consequently on your money!

Understanding how economics affects you and your pocketbook will help fill it up with more wealth.

What Does Monetary Policy Have to do with Debt?

Monetary policy influences interest rates. In Bernanke’s speech he stated that he expects interest rates to remain low for about two years. That is bad news for savers because it makes it difficult to get a high interest rate on their savings.

On the other hand, debt holders benefit from low interest rates. Mortgage rates are at their lowest levels in decades. Couple that with falling home prices, and if you have a down payment and think you may want to buy a home, now is a good time for that purchase.

What about credit card debt?

Credit card interest rates don’t seem very low. In fact, carrying credit card debt is a sure route to wasted money, and here’s why.

Amber has $1,000.00 in credit card debt. She doesn’t pay it off at the end of the month and adds a few bucks to the bill every month. Watch what happens when she doesn’t pay her $1,000.00 debt off in one month.

1. Amber owes $1,000.00 in credit card debt.
2. Every month that she does not pay that debt off IN FULL, she is charged interest by the credit card company for the privilege of the loan they are making to her.
3. Amber’s interest rate is 20%. (Yes, even with low mortgage rates, credit card companies can charge high interest rates!). That means, tack on 20% to any balance left on the credit card.

Watch the Impact

• Current debt = $1,000.00
• Interest rate paid to credit card company = 20%
• Monthly payment = $30.00
• Months to pay = 48 (that’s 4 years)
• Total interest paid = $435.00 (on top of the $ 1,000.00)

If Amber pays the minimum or just a bit more on her $1,000.00 debt, she ends up paying almost 50% more than her original purchases and it takes her four years to pay off the debt. And that’s only if she does not charge anything else.

Best Advice for Those With Credit Card Debt

Paying your credit card off in full as soon as possible is like getting FREE MONEY. Visit TheDebt Myth to figure out which debt to pay off first. Since your cash earns practically nothing, the one way to improve that return is pay off all of your credit card debt. It is like getting a raise!

Saving $435.00 in interest is like getting a 43.5% return on your money!!! Isn’t that much better than paying 43.5% more for your $1,000.00 purchase?

Barb Recommends

• WealthInformatics explores some interesting issues surrounding loyalty cards in her Rewards or Threats article.
• First Gen White Collar-How Economic Life is Structured; Be sure to check out her book too!!
•  Chicago Financial Planner-Balanced Funds; The Right Balance for You? Understand that balanced funds are not all alike. Make sure to do your homework before investing in one.
• CashFlow Mantra is trying to lose weight (and who isn’t?). See how he relates his wieghtloss struggle to Measures of Fiscal Fitness.
• In an attempt to increase “planning for the future,” Net Worth Project discusses How to Prepare for a “financial hurricane”.
• Prairie Eco Thrifter discusses a topic near and dear to my heart, How to Buy a Home.
• InvestitWisely shares 5 Economic & Life Lessons from one of my favorite stories, The Lion King.
• Enter to win an ipad at Life and My Finances, and enjoy his awesome story of success.

Barbara Friedberg Personal Finance Across the Blogosphere

• Benzinga Brain Trust contributor, How to Fix the US Economy Fast
• Yes I am Cheap, guest contributor, When is Good Negotiating Just Plain Cheap?
• Yakezie.com, guest contributor, Buying and Selling Real Estate, Not According to Plan
• I’m featured at Family Money Values
• TotallyMoney.com highlighted my guest article at Yes I am Cheap; When is Good Negotiating Just Plain Cheap?
• Totally Money Blog Carnival at Canadian Finance Blog
• Carnival of Passive Investing at Stock Market Basics

ACTION STEP:

Get a notebook and label it: “(your name) Personal Finance” and keep it by the computer. Use it to record all of your personal finance goals, thoughts, activities, and plans.

If you have credit card debt, make a commitment to pay it off now.

1. Take the first step and list all of your debts and the amounts. Face up to reality.
2. Make a plan to pay off one card.

How do you interpret the economic news? Do you make money adjustments based on the news?

image credit; Quizzletown